Recently upgraded from directory server 5.2 to ODSEE 11g, one directory proxy configure to one master directory server and one consumer directory server.
all the three instances are in the same sparc t3 machine.

Directory proxy server alerts server load average on the machine is above 6.00 normally it is 0.66. I'm not sure what is causing the sudden burst in the load ? the traffic is normal there is no abnormal requests coming to the server. proxy performance degrades over the span of 24 hours ....and Once i restart the proxy services (dpsadm restart) all load averages comes to normal and directory proxy runs normal for the next two - three weeks. The same cycle continues ...I'm not sure what was causing the sudden load increase.

I increased the JVM heap size from 1GB to 2 GB still continue to have the problem ..did anyone else experience similar problem. How did you fix it....

Could you please clarify the statement "Directory proxy server alerts server load average on the machine is above 6.00 normally it is 0.66" ?
What do you mean by "alerts" ? Is it related to the DPS administrative alerts as described in http://docs.oracle.com/cd/E35622_01/html/821-1222/gbece.html#scrolltoc? Is the "server load average" a metric computed by DPS (and exposed in the dps monitoring info) or is it a metric you compute by other means ?

You also mention that the proxy performance degrades over the span of 24 hours. What are the symptoms ? increase of etimes as perceived by the client applications? increase in CPU usage ? anything else ?

server load I'm referring to "prstat command" - server load average suddenly shoot up from 0.66 to 6.00 ie) the CPU usage. Alert is from our server monitoring tool not related to directory proxy.
Clients report connections time out (etime goes from etime=0 ..2..4.....) over 24 hours i can see the etime increases and eventually the proxy server get hung and non responsive. Once I restart all the performance back to normal at-least for another two weeks.

I suspect there might be a memory leak or JVM Garbage collection issue -- any expert input how to figure this out will help.

What exact release are you using ? 11g may correspond to 11.1.1.3.0 11gR1 , 11.1.1.5.0 11gR1PS1 or the newly released 11.1.1.5.1 (bundle patch) ?
I would encourage you to switch to the latest bundle patch if you are using an older release.

The GC seeems to be the culprit, but it should not trigger so often, so I would recommand to contact the Oracle support to open a case.